Semigration is slowing down in South Africa – with a new trend emerging

The semigration trend to coastal towns is slowing down in South Africa – but returning expats are giving a welcome boost to the luxury property markets.

According to FNB’s latest property barometer, buying activity in the affluent market dropped sharply in 2023, negatively weighing on property values.

This came from a productive 2021 and 2022, buoyed by favourable pricing, a robust recovery in non-labour income, improved balance sheets in the aftermath of the Covid-19 pandemic, and the rise of remote work.

The group said that the semigration trend is normalising, providing less support to high-end property demand in coastal towns.

However, anecdotal evidence shows that the reverse emigration trend – where South African emigrants return to the country – is starting to pick up, even if from very low levels.

These returning expats are also purchasing local property in the higher-priced segments.

“Ultimately, sentiment will be an important determinant of market outcomes, and subject to event risks such as the February Budget and National Election outcomes. We expect volumes to move relatively sideways this year and a price growth trajectory with a mild negative bias,” the group’s economists said.

Several property experts have highlighted the return of South African emigrants, which is helping property sales not only in the Western Cape but also in Gauteng.

Stephan Thomas and David Burger from Lew Geffen Sotheby’s International Realty said that many returning buyers left South Africa in their teens or their early twenties and are now coming back to South Africa for numerous reasons, such as the better standard of living and advantageous exchange rates.

Many are drawn to Cape Town’s Southern Suburbs, which are regarded as having the city’s best schools.

In addition, Rory O’Hagan from Chas Everitt said that many returning emigrants are buying homes in Gauteng and, in particular, the northern suburbs of Johannesburg.

He said that many are returning to Johannesburg to take up new corporate jobs or to create new businesses.

O’Hagan also said the wave of semigration to the Western Cape from Gauteng and other inland provinces has been reversed as the return-to-office mandates gain ground.

“Frankly, many top executives and professionals are now also weary of the costs and inconvenience of commuting weekly between work in Johannesburg and family in Cape Town, while others admit that they have not adapted well to the Cape’s unpredictable weather and would prefer the Highveld’s sunny winters,” he said.

“What is more, there are definitely more economic opportunities in Gauteng. According to a recent study by StatsSA, the region continued to account for a third of SA’s GDP between 2013 and 2022, despite all the semigration that took place in that period.”

Read: 11 things that will impact South Africa’s property market this year